The Legal Aspects of Service Charges

Whether you’re a Contract Director overseeing engineering and construction services or a customer looking to hire, there will invariably be a critical understanding of service charge legalities that needs cracking. Service charges are common practice in the contracting sector, and in most circumstances, they’re necessary. Most of the time, a service charge is a supplement to the fees associated with building, but in some rare instances, it can become a damning liability and a blight on a contractor’s reputation.

That said, it is not within the scope of this article to explain what service charges are or how they are broken down when it comes to engineering and contracting. For a brief, insightful overview, you can view this article here.

Sustainable building practices and project management are among key pillars of the successful relationship between contractors and their clients, and ensuring that service charge legalities do not affect the costs of delivering either facet is paramount. Project managers have to understand the service charge legalities so that they can predict the financial implications of facilitating a contract, and clients need to be able to identify potentially unfit services.

KayBee Tech’s top-tier professional platform is focused on sustainability and tech-led practices that emulate exemplary project management, both for staff and clients. When it comes to service charges, being legally aware is among the key aspects of keeping project management on track.

As already mentioned, all project managers should take the time to understand service charge legalities because they can become the subject of dispute if they’re not correctly understood or fundamentally supported.

Among common service charge legal problems, you’ll find disputes regarding the amount of the charge, the terms and conditions of the charge, the recipient of payment, and whether any contract breaches have occurred as a result of fee withholdings. For clients, it’s incredibly important that you don’t allow the legalities of service charges to inflict you in any way. It is all too easy to believe a service charge has been manipulated when it’s being levied with good reason.

It’s always worth explaining service charges accurately and without ulterior motive. The moment your project manager starts to obfuscate or skips around the truth, you should take issue with the matter. On the other hand, however, it is also the responsibility of contractors to not try and take advantage of clients through incorrect service charges, so be sure to do your due diligence.

Whether the specific issue is unpaid invoices, withheld invoices, the amount billed, or something else, it all comes back to the service charge legalities.

To say that good project management practices can neutralize the negative impact of the service charge legalities on any lurking issues is an understatement. If you’re not constantly checking your invoices and billing records to ensure that they’re both correct, and being duly processed, then things can turn sour fast.

For clients, you have a right to request proof of payment and the like, and your soon-to-be contractor should have no issue providing this if they’re being honest. The counter to this is that an unruly client can cause on-going problems if you have an ambiguous contract and allow for legal malpractice at the office water cooler.

As is often the case with legal issues, you can never be prepared enough for the service charge legalities, no matter if you’re a contract director or a customer with engineering or contracting aspirations. Environmental practices, project management – positive, negative, and legally frightening – they all exist within an industry rife with potential conflicts and problems, especially so with service charge agreements.